Singapore to Become a Smart Energy Economy

The Economic Strategies Committee (ESC) was formed in May 2009 to “develop strategies for Singapore to build capabilities and maximise opportunities as a global city in a new world environment, so as to achieve sustained and inclusive growth.” The ESC is chaired by Tharman Shanmugaratnam, Minister for Finance, and comprises members from the government, the labour movement, the private sector as well as academia.

The ESC submitted the report of its key recommendations to the Prime Minister in Feb 2010. In its report, the ESC highlighted 7 key strategies, one of which is for Singapore to become a Smart Energy Economy. This key strategy was developed by the ESC Sub-Committee on Energy Resilience and Sustainable Growth, which was formed to “recommend strategies to achieve our national energy objectives: economic competitiveness, energy security and environmental sustainability.”

Here are the 5 strategies and 11 recommendations to help Singapore build a Smart Energy Economy: Resilient, Sustainable and Innovative

Strategy 1: Diversifying our Energy Sources

1. Allow entry of new energy options on a market basis

2. Develop renewable energy sources

3. Study the feasibility of the nuclear energy option and develop expertise in nuclear energy technologies

Strategy 2: Enhancing Infrastructure and Systems

4. Invest in critical energy infrastructure ahead of demand

5. Develop Jurong Island as an energy-optimised industrial cluster

Strategy 3: Increasing Energy Efficiency

6. Promote energy efficiency for buildings, industry and in homes

7. Support clean and efficient technologies in transportation

Strategy 4: Strengthening the Green Economy

8. Establish energy as a key national R&D priority

9. Build capabilities for the green economy

10. Apply a green lens to government procurement

Strategy 5: Pricing Energy Right

11. Price energy to reflect its total cost

Overview

Here is an overview of the strategies and recommendations for a Smart Energy Economy:

As a small, resource-constrained country, we have to ensure that energy does not become a limiting barrier for Singapore’s economic competitiveness and growth. We also have to play our part in reducing carbon emissions as a responsible member of the global community. We must become a smart energy economy – resilient, sustainable, and innovative in our energy use.

In the medium term, Singapore should explore coal and electricity imports to diversify both the fuel types and fuel source countries in our energy portfolio. The import of electricity is an option which can free up valuable land in Singapore. It could also allow us to tap on the significant renewable energy potential in our region, such as in the form of hydro-electricity or geothermal power.

For the long-term, we must continue supporting innovation and investing in the infrastructure necessary to develop renewable energy. We should also study the feasibility of nuclear energy, a possible option in the long-run to meet baseload electricity demand, as well as energy security and sustainability imperatives. Advances in nuclear technology will make it much safer than earlier designs, and we should carefully study its viability for a small city-state like Singapore.

Push ahead to establish Intelligent Energy Systems (IES) as the centrepiece of a smart energy economy. The IES will promote greater competition among retailers and enable households to make informed choices on their electricity consumption. At the same time, the IES will incorporate devices such as smart meters and home automation networks to programme appliances to function during off-peak hours when electricity prices are lowest.

Make early investments in public goods such as energy infrastructure to improve national energy security and efficiency. One example is the liquefied natural gas (LNG) terminal which will allow Singapore to gain access to global gas markets. Investing in the extension of the gas pipeline infrastructure can also potentially reduce the cost of electricity and open up new economic clusters in Singapore.

Develop Jurong Island as an energy-optimised industrial cluster. We should harness innovative systems-level solutions, to provide integrated, low-cost and low-carbon solutions for the industry clusters on the island. For example, recycling waste heat from industry for desalinating sea water; the desalinated water would then be channelled back to industry for cooling industrial processes, forming a virtuous cycle. With government planning and infrastructure investment to enable such “exchanges”, we can significantly improve resource efficiency.

Step up measures to promote energy efficiency for buildings, industry and in homes. We should enhance incentives, education and adopt essential legislation such as mandatory energy audits which will help build energy conservation know-how and internalise energy management practices.

Support low-carbon solutions in transportation. We should continue the shift of commuter load to public transport and support the introduction of clean and efficient technologies for public buses. This will ensure that energy-efficient public transport can be realised without higher prices for commuters. We should set the appropriate incentives for the adoption of clean vehicle technologies for private vehicles by awarding the Green Vehicle Rebate (GVR) based on fuel efficiency or carbon emissions of the vehicle.

Price energy to reflect its total cost, taking into account various externalities and constraints, such as energy security and environmental sustainability. Appropriate price signals could both promote the use of, as well as encourage investments in energy-efficient and low-carbon solutions.

The Government should study how best to implement a carbon pricing scheme in anticipation of future carbon constraints, should there be a global agreement on climate change. It can also insure us against future spikes in energy prices. This should be carefully calibrated and introduced gradually, with offsets for specific groups like low income households to buffer the transition.

Source: ESC Main Committee Report; ESC Sub-Committee on Ensuring Energy Resilience and Sustainable Growth; ESC Press Release Annex A

Image credit: ESC Report

Singapore to Reduce Carbon Emissions by 16% Below 2020 Business-As-Usual Levels

Before the Copenhagen Conference

On 2 December 2009, the Singapore government announced that Singapore will reduce its carbon emissions by 16% below 2020 business-as-usual levels, provided that:

Singapore will only commit to this if there is a legally binding global deal that obliges all countries to cut emissions, and if other countries offer significant pledges

- Senior Minister S. Jayakumar

This announcement was made in light of the UN Climate Change Conference 2009 (COP15) in Copenhagen, Denmark, which was held from December 7-18, 2009. Read more about the 16% cut and the government’s approach to COP15 from the Ministry of Foreign Affairs news release.

After the Copenhagen Conference

The discussions at COP15 failed to produce a legally binding global agreement and instead resulted in a non-binding Copenhagen Accord. Nevertheless, the Singapore government said that:

When a global agreement on climate change is reached we will implement the additional measures to achieve the full 16 percent reduction below business as usual in 2020

- Dr Yaacob Ibrahim, Minister for the Environment and Water Resources

The next round of climate talks and discussions on a global agreement will be at COP16 in Mexico from November to December 2010. Meanwhile, the government announced that it would still cut emissions by between 7% to 11% below business-as-usual levels, which was planned as part of the Sustainable Singapore Blueprint published in April 2009 (the 7% to 11% cut was not mentioned during the release of the blueprint). The full 16% cut will be implemented when a global agreement is reached in the future.

Our Thoughts on the 16% Cut

Singapore’s target means it will cut roughly 12 million tonnes of CO2 by 2020, said Dr Yaacob.

This is based on a projection that the country’s emissions would reach 75 million tonnes of CO2 by 2020 if no measures were taken.

- Straits Times

Singapore’s absolute carbon emissions in 2007 is about 40 million tonnes and from the statement above, it seems that the government projected that carbon emissions will reach 75 million tonnes in 2020 on a business-as-usual scenario. If Singapore takes action to reduce its emissions by 16%, the cut is equivalent to 12 million tonnes, meaning that emissions would reach 63 million tonnes in 2020. This cut is just based on 2020 levels, which implies that there is no peak in emissions and a drop thereafter. What we would expect is a continuous increase in absolute carbon emissions till 2020.

The graph above shows the absolute carbon emissions from 1990 (22 Mt) to 2007 (40 Mt) based on available published data by the government. If we do a projection of the emissions from 2008 to 2020 based on an estimated 5% annual growth (BAU), we would reach 75 Mt, which is the business-as-usual scenario projected by the government.

If we do a projection of the emissions from 2008 to 2020 based on an estimated 3.6% annual growth (pledge), we would reach 63 Mt, which is the 16% cut committed or the we-will-take-action scenario projected by the government.

From 1990 to 2007, the average annual emissions growth is about 3.6%. We would expect a projection for business-as-usual scenarios for the future to use this number but the government uses a higher business-as-usual growth of 5%.

What we find strange is that when the government commits to the 16% cut by 2020, it is reducing the average annual growth in emissions from 2008 to 2020 from 5% to 3.6%, which is the same annual growth as what we have been doing over the past 17 years. In other words, if we continue business-as-usual from 2008 to 2020 without the 16% cut, we would still reach the projected 63 million tonnes in 2020 or the we-will-take-action scenario.

So, are we really reducing carbon emissions by 16% from 2020 BAU levels or are we just assuming a higher BAU level in 2020 and then committing to 16% cuts, which results in a level we would reached anyway if we don’t take any measures to reduce emissions?

Let us know what you think.

Reframing the Climate Change Narrative

Venue: Seminar Room 3-1, Level 3, Manasseh Meyer, Lee Kuan Yew School of Public Policy, 469C Bukit Timah Road, Singapore 259772

Speaker: Prof Arvind Subramanian, Senior Fellow, Peterson Institute for International Economics Senior Fellow, Center for Global Development Senior Research Professor, Johns Hopkins University

and

Um Woochong, Deputy Director General, Regional and Sustainable Development Department Asian Development Bank

Synopsis: Thus far, international negotiations under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC) have focused on emission reductions, the “targets and timetables” for doing so, monitoring and compliance regimes, and incentives in the form of finance and carbon markets. The failure of the recent UNFCCC meeting in Copenhagen in December 2009 has highlighted the limitations of this approach.

In this lecture, Prof Subramanian will argue that the current approach of emphasising emission reductions creates a “zero sum” burden sharing arrangement in which countries do not benefit from being first movers, and which results in countries blaming one another for the climate change problem. The current narrative thus poisons the atmosphere for negotiations and makes it unlikely that a global deal would be reached. Prof Subramanian will propose a reframing of the climate change narrative — away from a singular emphasis on emission reductions towards clean technology development and diffusion, and equitable access to energy-based services for economic growth. He will also discuss how such an approach might gain traction in the aftermath of Copenhagen.

Notably, the Asian Development Bank is playing an important role in the very areas that Prof Subramanian sees as important in achieving traction on the climate change agenda. Given this, Mr Um Woochong, Deputy Director General of the Regional and Sustainable Development Department at the Asian Development Bank, will discuss how Asia is likely to be affected by climate change and the steps that the Asian Development Bank is taking to address the issue.

For details and registration, visit the LKYSPP website.

Source: LKYSPP

Methodological Approaches for Cost-Effective Carbon Trading

Venue: MEWR Theatrette, #4-00, Environment Building, 40 Scotts Road, Singapore 228231

Speaker: Sébastien Raoux, Ph.D., J.D., Esq., President & CEO, Transcarbon International Corporation

In this presentation, Dr. Raoux will review the essential elements of carbon trading methodologies and cover topics such as additionality, anti-gaming and capping procedures, the calculation of baseline and project emissions, and monitoring methodologies. He will pay particular attention to the issue of accuracy and uncertainty in the determination of emissions reduction, and examine the tradeoffs and procedures to optimize the cost effectiveness of carbon trading projects. He will illustrate the presentation with examples taken from existing CDM methodologies (Clean Development Mechanism), in particular related to the electronics and the high-tech industry, as well as energy and waste management.

For details and registration, visit the SEI website.

A Smart Energy Economy: Panel Discussion on ESC’s Recommendations on Energy Resilience and Sustainable Growth

Venue: National University of Singapore, The Auditorium, University Hall, Lee Kong Chian Wing, Level 2, 21 Lower Kent Ridge Road, Singapore 119077

Join the panel discussion on the Economic Strategies Committee’s (ESC) recent recommendations on Energy Resilience and Sustainable Growth, moderated by Jessica Cheam, Correspondent, Straits Times, Money Desk. The panelists include:

• Prof. Linda Yuen-Ching Lim: Professor of Strategy at the Stephen M. Ross School of Business at the University of Michigan
• Dr. Natasha Hamilton-Hart: Associate Professor and Deputy Head in the Southeast Asian Studies Programme of the National University of Singapore
• Dr. Tilak Doshi: Chief Economist and Principal Fellow at the Energy Studies Institute
• Dr. Cheng-Guan Michael Quah: Chief Scientist and Principal Fellow at the Energy Studies Institute

Visit the Energy Studies Institute (ESI) website for details and registration.

« Previous Page — Next Page »